The Rosenbaum Law Firm P.C. Blog

There were times in my life when I needed help and just didn’t get it. One of my favorite quotes based on those kinds of experiences is: “I needed your help, you weren’t there, and I no longer need your help.”

With falling stock markets, this might be the time to pounce as a financial advisor. I’m sure there are plenty of financial advisors that are incommunicado with their plan sponsors. When you have returns that are -20% or more, you have anxious plan sponsors and plan participants who might be freaking out if they check their balance every day.

So with advisors missing in action, this may be the opportunity to be there and contact 401(k)plan sponsors and be that reassuring voice that the incumbent financial advisor should be.

I keep on saying that timing is everything and with Bitcoin falling about 60% off its high, this isn’t the time for adding it to 401(k) plans.

In May, Rep. Byron Donalds (R-FL) introduced a bill that would allow Bitcoin and most other financial assets to be included in 401(k) retirement plans.

The bill is the House version of the Senate’s Financial Freedom Act of 2022. The original bill featured identical language and was introduced by Sen. Tommy Tuberville (R-AL).

Both bills were put forward in response to Department of Labor guidance in March. That guidance advised plans against allowing crypto in 401(k)s.

This being an election year and Democrats in control of both houses, for now, I don’t expect any chance for these bills this year.

My latest article for JDSupra.com can be found here.

My latest newsletter for retirement plan providers can be found here.

My latest article for JDSupra can be found here.

Hawaii maybe the latest state to approve the creation of a state-run IRA program but they will not mandate auto-enrollment for those eligible to participate.

Workers at companies with five or more employees that lack a retirement plan will have to sign up for the Hawaii Retirement Savings Program, which was passed by the state legislature but hasn’t been signed by the Governor. Self-employed individuals also would be able to take part.

The program would be administered by a yet-to-be-formed formed Hawaii Retirement Savings Board, which upon its creation would work with the state’s Department of Labor and Industrial Relations and the Department of Budget and Finance. The board would provide the state-facilitated payroll-deduction plan to private-sector employees beginning on a date to be established by the future board.

Stock markets these days are seeing a lot of negative returns. Every day, it seems another stock in my portfolio has had a downturn. I’m not in a panic because I see stocks at a discount as a buying opportunity.

If you have a retirement plan sponsor who feels overwhelmed with what’s going on in the stock market, this isn’t the time for investment advice by you. It’s time to reach out to your plan’s financial advisor and determine whether fund lineup menu changes are warranted and whether communication should be made to participants during this volatility.

According to Sharebuilder 401(k). 74% of small businesses still don’t offer a retirement plan for their employees.

Many small business owners believe incorrectly, that their business is simply too small and that 401(k)s are too costly.

58% in the survey believe their business is too small to qualify for one, 32% say they can’t afford a match and 24% believe 401(k) plans are too expensive to set up and manage.

Clearly, there is a communication problem. While I assume that State mandated IRA programs will spur retirement plan coverage, I believe that as an industry, we need to end the urban legend that businesses are too small to sponsor a 401(k) plan or be an adopting employer in a pooled employer program.

It’s easier to push 401(k) plans when times are good. Times aren’t good and it’s a tougher sell when stock markets retreat. For sales and client retention, times are going to be tough. I don’t think this inevitable recession is going to be short-lived, we have a day of reckoning with too much government spending and being slow to raise interest rates.

The downturn will hurt, I see it with my checks as a plan fiduciary, but nothing will last forever and the good times will be here again.

In the 1970s, the Phillie Phanatic was born. While Mr. Met was the first mascot in baseball history, the Phanatic was a bigger hit. Soon everyone wanted one and The New York Yankees hired the people to design the mascot, which they called Dandy.

Remember Dandy? Most don’t. The problem was that the Yankees didn’t really need one and most importantly, Dandy looked too much like Thurman Munson, who was killed in a plane crash he piloted in August 1979.

Timing is everything and we see that now with Bitcoin in 401(k) plans debate. When Bitcoin was $69,000, I’m sure the interest was there. With it being south of $30,000, I don’t know if the appetite for allowing it, is stull there.